Friday, August 04, 2006

Inheritance

A lot of liberals love to talk about how the inheritance tax is necessary to fund this project or that group, but they always fail to provide reasoning as to why it is a good tax.
The inheritance tax is not a tax on income, which is all the 16th Amendment allows for. I know a few of you will try to claim that it is, since the heirs will find the inheritance to be an income, but the tax is not derived from what is received, but the total of the estate. As such, it is a vindictive tax on a person's savings over a lifetime. These assets have been taxed as income already, and any property has been subject to property taxes as long as it has been owned. We already have gift taxes that will handle cutting the inheritance down without a death tax.
As for the Left's assertion that it only affects the rich, ask yourself how much property might be valued at. Especially property that could be deemed profitable. At the highest exemption of the current system (the highest exemption will kick in in 2009), everything above $3.5 million will be subject to the tax. This may seem like a lot, but homes aren't cheap, nor are farms or other business assets. And neither of those is very liquid. An estate consisting of a somewhat large home in a relatively expensive area might be forced to sell the home just to pay the tax. Throw in a family business and you're suddenly forced to decide which one to keep. Assuming you can get enough out of the other to pay the estate tax. And in 2011? Back to a $1 million exemption. Grandma leaves a home? Well, you may end up with some money, but say goodbye to the memories.
Is it fair to tax a person's savings? No. Is it fair to tax those savings when that person dies? The answer is still no. The Constitution allows only taxes on income.
Why do the Dems focus on this issue? Simple, it wins them votes. Average Joe doesn't see a problem with taxing the rich, and the Left tells us that's all this does.
And since this has recently been linked to the minimum wage issue, here's something I wrote on that, too.

No comments: